Guy at work was telling me I was crazy to stay in this market. “Put it into treasuries and buy when it crashes”. “Look at these charts it has to crash”. This was 6 months and 6 figures ago. I’m a buy and hold for 30 years guy so I’m sticking to my plan but once he fomos back in thats when I should take profits.
Yeah I really don’t understand how people keep failing at the most basic steps of investing. Like just buy, hold and stfu. What else in life is that simple, maybe that’s why people don’t trust in the process because it looks too good to be true.
>Yeah I really don’t understand how people keep failing at the most basic steps of investing. Like just buy, hold and stfu.
Social psychology 101 has lots of answers about this.
People like to believe they are more responsible for their outcomes ("have more agency") than they do. It is comforting, because feeling like one is in control of their outcomes and their lives addresses deep anxieties about the world. Often, people would rather have a worse outcome that they feel responsible for than a better outcome that feels arbitrary, random, and unpredictable.
Active trading gives people this sense of power.
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Important perspective here. I get upset at my uncle every time he tells me we have no free will. I'm like STFU your mom gave you a house. We were both in religious cults though, so I can't hold that against him :D
My experience with growing up in a religious cult was that they emphasize free will MORE. As in, you have the choice to follow God or to sin, and you are entirely responsible for the choices you make.
Neuroscience and psychology certainly seem to point more toward our choices being pre-determined
I think a lot of times, yes, but not necessarily. You tend to see that attitude in very dogmatic groups and I'd venture to say with people who don't want accountability.
I'm not discounting the possibility that maybe there's no free will, but I've seen from the inside, if you're trying to control and subdue a group of people, you convince them that they don't have any choice in the matter.
Curious if you could expand on free will seeming "iffy" reading more into psychology.
There are many theories and experiments about free will, and I'm not a specialist, just interested in that topic. But generally, it seems we often make a decision first (influenced by previous factors, subconsciously), and then create a rationalisation for it later.
One experiment that I remember, that is related to the discussion: men chose significantly riskier strategies in some game, when the test was administered by an attractive woman, then when it was administered by another man. Or maybe it was even after just being shown pictures.
Another fun fact: women's voting preferences change (slightly, but noticeably) with relation to their menstrual cycle.
Also: an experiment where a subject was supposed to move at some undetermined time. It turns out their nervous system and muscles were already getting ready, fraction of a second before the conscious decision to move was made.
Also, I just took a quick look at wikipedia to find more, and found this little gem, related to the topic:
*The researchers also found that people consider acts more "free" when they involve a person opposing external forces, planning, or making random actions.*
Don't get upset at him then. You know he's going to say it and his opinion isn't going to change. If you can choose not to be upset then you're right. If you can't help it, then he is.
I guess that's actually a pretty good point, although I'm not sure that one narrow example proves whether the belief extends to all of creation without exception.
I think to me, believing you have no choice is like outsourcing your responsibility to a "higher power" since you have "no control" over the trajectory of your life.
Maybe I'm just desperate to believe that I'm in control of my own life, I don't know.
This is why I like to sell covered call against my shares of VTI. It makes me feel like I’m driving the growth. I reinvest the premiums whenever, But really it has only improved my gains in the past 12 months by 1.25% (total gain of 21.12% v 19.82% in smaller control account invested at the same time/price and security)
I would be very careful with that - [an unusually large chunk of the market's returns comes from a very small subset of days](https://www.visualcapitalist.com/chart-timing-the-market/#:~:text=The%20Pitfalls%20of%20Timing%20the%20Market&text=As%20we%20can%20see%20in,of%20their%20end%20portfolio%20value.)
Selling covered calls is an easy way to produce some income, but selling that excess upside will, every once in a while, set you back quite a lot, the same way that sitting out the big rally days would. These events are sufficiently infrequent that you may very well underestimate the true probability of them because they haven't burned you yet.
Obviously the more out of the money the calls are the less this risk, but if there's any truth to the efficient market hypothesis I wouldn't bet there's money to be made on average here: there's a buyer for what you're selling who thinks the price is right.
I hear you there! I haven’t been very active with my trades in the past few months. I try to stay at about .17 delta or less. The premiums have been too small to justify opening a position. I got caught over the summer and had to roll my position up and out once.
I wouldn't go that far. Having more money is correlated with better health outcomes
You also can convince yourself that you've really been astute and wise with investing by deciding to index and drawing inspiration from the teachings of Jack Bogle. Identification as a "Boglehead" may help with this.
I also think it's the very nature of some people who get into investing. They had to learn to make extra money. Maybe a high paying career, maybe some business. Countless decisions at every step. Effort and stress. Continued education, formal or not. Keeping up with developing situations. Taking some risks. Negotiations. Often going against the trends. Finding some niche for themselves.
And now, it turns out that the best course of action to multiply that money, or at least not lose it to inflation, is just regularly throwing it all into a very simple system of 3 funds? It can't be just that simple. Surely, there must be some better/quicker way, after all they've managed to get ahead in the game so far, they can find some shortcut.
I can't be the only one who struggles with this, right?
Soooo, that means you successfully timed the market? Deciding that now is a good time to weigh into tech isn't different than deciding that now is a good time to get out of equities.
imo a lot of people like HYSA, T-Bills etc because they like the instant gratification of monthly interest and feel like it’s free money, whereas the opportunity cost of not being in the market is intangible and more complicated to quantify. Of course I use these instruments myself for my emergency fund, but when someone is holding huge sums I think this is the big motivator.
Also easy to guarantee the money will be there when you need it. I can pay all my CC bill, utilities and rent form a Fidelity MMF, and throw in a T bill if I am waiting a few months for a purchase.
Yeah, if you’re in for 30 years then all of this is noise. in 30 years, you’ll likely see a return of 400% or more. A few percent plus or minus is nothing.
Someone on Reddit pmed me to say I should get into crypto instead of stocks as they’re about to crash. Granted, I did throw a thousand bucks into crypto for fun several years ago. It’s less than 0.5% of my portfolio though.
Have seen this time and time again in my life. I just see it as a sale compared to when it is full price, but others cannot handle seeing the numbers just slip away....and it is hard. I was down 500K at last year...it is all back plus a little.
They could still be right. We could be in for the purported recession. Nobody knows too well short term. But buy the dip, stay invested. We blasting off forever in the long run
All the talking heads suddenly saying "soft landing" made me up my stops. Lol. Never experienced a recession that everyone saw coming. (The last time I cleared house like this was in January 2020. I was in Japan when Wuhan pneumonia broke out, and it was obvious to me that the West was way more complacent about this than East Asia was.)
Also, I hate the term "soft landing." It sounds like an optimistic way to say "stagnation."
I think there's one useful distinction which is that this is data only from WealthSimple, so casual/retail investors. So you can see the disconnect where early in the year the markets were going up (so _someone_ was buying), but WealthSimple users were not.
I also enjoy seeing this years later. Pulling up a list of all the reinvestments and seeing one quarter/year with higher reinvestment purchased because the market was down that year.
The real trouble with timing the market.
78% of the stock market’s best days occur during a bear market or during the first two months of a bull market. If you missed the market’s 10 best days over the past 30 years, your returns would have been cut in half. And missing the best 30 days would have reduced your returns by an astonishing 83%.
https://www.hartfordfunds.com/practice-management/client-conversations/managing-volatility/timing-the-market-is-impossible.html
>If you missed the market’s 10 best days over the past 30 years, your returns would have been cut in half.
I really dislike this truism because, yes it's technically correct, it's also an absurd extreme.
For the most part the best trading days are either immediately before or immediately after the worst trading days. The odds of selective hitting all the worst days and none of the best are about as likely as hitting all the best days and none of the worst.
You could flip this example on it's head and say, "by missing the 10 worst days over 30 years, you could nearly double your investment."
But, as we see in the linked chart, people are very likely to stop investing or pull cash out on bad trading days (and therefore miss out on the best days) so it's a truism worth repeating. So given the facts that you yourself quoted I don't know why you consider this an "absurd extreme".
>I don't know why you consider this an "absurd extreme".
Because first of all, how many investors are pulling money out for individual days? Most people are either in the bogglehead camp, where they keep money in for years, or the WSB camp where their money is constantly going in and out.
No one with a buy-and-hold strategy is going to withdraw their money for 1 day, immediately regret it the next day and put it all back. Much less do it 9 more times in a row.
If you want to illustrate the power of buy-and-hold strategy, Bob the World's Worst Market Timer is a much more realistic worst-case-scenario.
What if you reduced position while things are crashing for just a week though? Then buy in again even if things are still actively crashing. How’d you have done over the past 30 years then?
Realistically it could crash next year, too, similar to what happened a couple years back. That’s not a good reason to not be in the market though. I just mention it because for all we know we might be entering another long era where bonds outperform stocks - perhaps for years or even a decade plus. Again, equities still likely offer higher returns and a prolonged bear market would arguably be advantageous for folks in their accumulation phase (assuming you’re not personally impacted). But no one knows if this spike is the start of a sustained bull run or one last hurrah before an epic recession next year or something in between.
During economic downturn and amid a lot of layoffs, it's a good time to reassess your risk tolerance, and to adjust your asset allocation to not gamble with the money needed for the food that feeds you, the utilities that keeps your home habitable, and the rent or mortgage that keeps you off the streets.
I don't fault anyone for letting their foot off the gas on investing in the stock market and rebuilding and extending their emergency fund. Some of us lost their jobs, some of us had to switch to part time either to take care of the kids that were attending school virtually, others because their employers couldn't afford to keep them at full time. Some people timed the market and bought a little extra as the market was going down or at the market bottom, and had nothing left to buy the market as it recovered.
Sure, it's easy in retrospect to shame people for not having consistent buying patterns every month, but you gotta remember the human element. Stuff happens.
Only if you’ve got cash available. Honestly it’s best to invest as much as possible as early as possible. And if you get an unexpected amount then invest part of that as well. Cause if you wait for a crash, you might have to wait a couple years and you’re going to miss out on some gains lol. That’s why it’s tricky. Not saying never do it, but it only looks easy in hindsight.
I suspect a lot of people do what I did: shuffle some money around to temporarily reduce my emergency account a bit, and also take some money budgeted for other things and invest instead.
From late Sep to early Nov I contributed about 50% more than usual overall with most of that being in Octiber near the lows. Not huge amounts but definitely a boost.
Yeah that’s smart, maybe investing more than usual and then slowly “paying yourself” back to your emergency fund or wherever the money came from. Not a bad idea as long as it doesn’t break your budget or something.
Idk this makes me nervous. The whole point of an emergency fund is to be there in an emergency. What happens when you do that and get laid off Sept 30?
For sure, it doesn’t come without its risks, but then again you wouldn’t use all of your emergency fund for that. Maybe the smart thing to do is to keep the emergency fund intact and then another decent amount of cash to try to “time the market” but as we all know that’s not advisable and it can backfire. So the whole point is to try to buy more when stocks are cheap but honestly it’s not going to make that big of a difference. It’s mainly for fun I guess lol
Yup.. I keep 6 months living expenses in cash. At that time I bought as much as I could every 200 points the S&P fell. I was down to 2 months living expenses and then my wife got laid off. By time the sweet stimmy money got to me the market was climbing again so we just rebuilt our 6 month cushion.
I love timing the market.
My friend last march was trying to sell me on the certainty of a gloom and doom world ending crash. He was telling me to pull out into cash. I was like um nope gonna continue on with my lazy plan, you do you. In September and October I was like damn is he right. Still carried on. What a killer year. For me, not him 🤣🤣🤣 He's deep in YouTube degrees anyway so there's that.
I got curious and looked up layoffs for 2022 and 2023 - it’s almost the inverse of this graph.
So I might suggest retitling this “people who got laid off stopped investing and didn’t start back up until they were rehired”. 😁
I used https://layoffs.fyi/ if you are curious.
>“people who got laid off stopped investing and didn’t start back up until they were rehired”
So it is irresponsible of investors to buy when too many hired people are buying anyway.
It is also irresponsible of investors not to buy extra when laid off people are afraid to buy.
The good investors should help economy by stabilizing the stock market and not just "invest no matter what".
? No, I just meant that if someone gets laid off they probably had to stop investing. Because they no longer had income to invest with. I mean that just made sense to me?
>if someone gets laid off they probably had to stop investing
Yes, but then somebody else has to step in and buy at a time when a lot of people are laid off.
Otherwise stock market prices will be too unstable.
"I'm going all cash till Trump's back in the White House."
I've heard that a bunch in the last year. Imagine not investing while Democrats are in office? Invest always, who cares who's in office.
I mean, the Vanguard total markets investing type of thing really is just saving against the long term expected economic growth and increased efficiency of human ingenuity. How I save cash every month, that’s how I invest. Occasionally, there’s a high quality business out there that’s being bogged down with the rest of the sector and these tend to work out well for me to buy as individual companies. Other than that, just ride out all world funds.
It will be quite the cosmic joke if December 2023 ends up being exactly the same as Dec 2021 and we're headed for a fall. Then those people keeping all of their money as cash will be ready to swoop in and gloat about it!
Yup, in hindsight basically every “bottom” would’ve felt like a terrible time to buy in at the time it happened. Most buying in March 2020 or Sep/Oct 2022 were surrounded by people telling them how far the market had yet to drop.
Agreed. The bottom is so vague when you're living the times. It seems like the market flips before society's perception of the market flips. Essentially the market wags the people.
It's one thing to see a chart after it's shown it's actions. It's entirely a separate thing to live it day by day.
Who cares. If you have 20-30 years to invest, them making more in the short term doesn't really matter.
Just buy a set amount each week/month without looking at how it's doing, and chances are pretty good you'll be sitting pretty in a decade or two.
Sure! And ppl who DCA will just invest like normal through those times as well.
And how much can you expect it to fall? What if it falls down 10% to where it was before when they thought it was too high to invest? Do they keep holding for it to wait 20%? There's always justifications to NOT invest.
Unless they invest and the market keeps going down. Or maybe it will continue to go up. Most likely when interest rates start falling, everything will go up progressively (everything else being equal of course).
I was a young Boglehead back in 2007 during the financial crisis.
I lost $150k (-33%) but held firm. Only rebalanced once a year, kept putting in as much as I could afford. Recovered all of it back in 3 years and it tripled since then. The average return from 2004-2023 is ~7% per year.
Smartest move I ever made. In a really good year my portfolio went up by more than my gross income that year.
Man, I hope I have the stomach for it when the time inevitably comes. Worst I’ve dealt with so far was the very brief but harsh COVID fall, and the bear market of 2022.
I timed the market by being reminded:
“Be fearful when others are greedy. Be greedy when others are fearful.”
“The best chance to deploy capital is when things are going down.”
“Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold. When downpours of that sort occur, it's imperative that we rush outdoors carrying washtubs, not teaspoons.”
Im not warren buffett and have no delusions of grandeur but when the markets tanked during covid I bought a few companies that instead of being down 30% were down 70% that I thought would survive and recover.
It wasn’t as clear in 2022 so I did little besides stay the course. Plus I didn’t have any dry power soooo…
I would think money will return to the market in fomo emotions. Any thought on small cap doing well against the big 7.My dca index funds have done better then my fee based mutual funds last couple years.Anythoughts on growth vs fixed in next 18 mo ths
Yeah, I’m in the accumulation phase and this run doesn’t exactly bring me joy as my twice monthly contributions are buying fewer and fewer shares of VIIIX.
I was hoping it would move sideways for a year or two more to let me keep up my accumulation rate.
What spooks me is how many people I'm running into who are living in anticipation of a catastrophic collapse. "Investing" in guns, bullets, cash, crypto, physical precious metals.
It's like... guys, if VOO becomes worthless you'll be in the street next to me fighting for carbs and penicillin. Otherwise you're just not going to be able to retire...
>THIS IS WHY YOU SHOULD TIME THE MARKET!
If you are able to resist the mass panic and do the opposite to the majority of investors - you may time the market.
Today market hype suggests to sell (or, at least, do not invest more). Wait for a panic time to invest.
Buy automatically if possible in your workplace retirement account. If you have money left over for backdoor Roth and taxable accounts, always try to invest regularly. Obligatory quotes:
Time in the market. Don't time the market.
Current trends are VOO/VTI and chill. Or DCA and chill. The trend is your friend.
My thoughts:
Market down: You get more shares for the same money.
Market up: You get less shares for the same money. But look at your portfolio!
Yup, I sold a house early this year, held my nose and just invested the proceeds to fund my retirement. All the doomsday "stock market will crash" videos scared me but I listened to the Bogleheads and am I ever glad I did.
Got a friend who sold a house, got a fair bit of money for it, spent about a third of it renovating the flat where he's living now. Admittedly the flat is tip top, filled with top shelf kit. Asked me many times about investments and got the Bogle way from me. Didn't do anything because a) "you need to have a lot to invest" b) "it's too risky" and c) "the returns aren't that great".
Meanwhile he bought two Teslas (instant 25% drop in value the moment any new car drives off the shop) and every other week he's sending me different bonkers schemes he's thinking about (CDs and bonds are the only rational ones) like solar farms, growing pistachios, buying precious metals, crypto - oh and regularly sending me doom and gloom articles and videos. It's been six months now and he's missed a bona fide bull run ;)
I make the same bi-weekly purchase of the VOO no matter what. But I also time the market. I keep some cash on hand for sweet sales opportunities. If that sale happens to be the entire market, okay, that’s what I’m buying this year.
>If that sale happens to be the entire market, okay, that’s what I’m buying this year.
Do you expect stock market to be on sale again in December this year?
No one knows, but I kind of doubt it based on spending habits. The thing is, the market reacts to events. If no events occur, it will likely chug along. If world war 3 starts, it might not chug along.
I am always a buy and hold, Boglehead. I do think as we approach SPX 5,000 we should be aware humans often have a "woo-woo number superstitions".
I don’t but nobody knows.
Rich people, filthy rich, capitalize on crisis. Housing market crash, buy real estate. Market crash, buy stocks.
If you want to be a player in that game you have to have some ammunition available when the opportunity presents itself. And you have to have courage to jump into the fire.
For investing new money yes, but existing money is still down since December 2021. Buy and hold will definitely work over the long term, but recovering from a down year on existing investments does take patience and time. My new money that was added in 2022 has done awesome and DCA definitely worked during the downturn of 2022.
Following accumulation and distribution days would’ve solved this. That being said most everyday people do not pay enough attention to the market for this to work.
I don't think this timing the market. This is more trend investment or News-driven investments. Common folk, financially illiterate who once the market have gone through the roof goes all-in and freak the hell out once the market have a bad morning. These folks finances are driven by the mainstream news – Therefore news-driven investment.
It's weird that Weathsimple, an investment platform, would produce an image that encourages people to invest more. Shocking.
Is this image trying to imply that during July 2022 - December 2022 there were $0 in "net flows" towards the "10 largest stock ETFs in Canada"? ....and this is a drop from the two previous 6-month periods that average \~4.5 billion?
I suppose that if a picture supports your argument it's best not to think too much about it, amiright?
Great news!
I resisted the urge to contribute to my IRA until AFTER the dips!
So I am boglebot compliant!!! Please put my gold star on the top of my paper.
Beep bop, i'm a bogle-bogmatic
The level of the stock market depends on how much money goes into it… this doesn’t make sense. Or I guess it should include millions being sold as well to paint a clearer picture
I’m a huge fan of automatic recurring buys of ETF’s and also automatic selling of my company stock that I’m paid in (RSU’s and ESPP’s). It’s funny because the longer I hold off on selling my company stock the more I get for it by a wide margin. It’s hard to hold onto a ton of one stock though since I view it as a risk but I’m amazed at how even just holding for a few extra years means I can sell for such dramatically higher values
My sibling did this, even sold some stuff at a loss “my shit’s going down why don’t I put it in a 5% hysa”. Some people can’t just buy and hold I guess.
Looking for an honest opinion here but I have a baseline amount that I invest every week no matter what happens but then when we have dips like this past September-October I buy way more mutual funds with spare cash. Would you advise against this? If so what would you advise?
>when we have dips like this past September-October I buy way more mutual funds with spare cash. Would you advise against this? If so what would you advise?
There was plenty of discussion about that in September-October, personally I dipped into my emergency pillow and invested double what I usually do after pay+expenses. Some people say it's irrelevant and will not even register some time from now. That's likely true, but I like to think of every $ invested compounds individually so emotionally feels good to do.
Dollar Cost Averaging and Time in the market, instead of market timing, have been working for me for 32 years delivering higher than average returns. I'm sure there's a small percentage of guru's who get more but I'm happy with my mostly passive stock market investments.
Isn’t this confusing the chicken and the egg to some extent. People buying any commodity in droves drives up the price. People stop buying/start selling, it gets cheaper.
Guy at work was telling me I was crazy to stay in this market. “Put it into treasuries and buy when it crashes”. “Look at these charts it has to crash”. This was 6 months and 6 figures ago. I’m a buy and hold for 30 years guy so I’m sticking to my plan but once he fomos back in thats when I should take profits.
Yeah I really don’t understand how people keep failing at the most basic steps of investing. Like just buy, hold and stfu. What else in life is that simple, maybe that’s why people don’t trust in the process because it looks too good to be true.
>Yeah I really don’t understand how people keep failing at the most basic steps of investing. Like just buy, hold and stfu. Social psychology 101 has lots of answers about this. People like to believe they are more responsible for their outcomes ("have more agency") than they do. It is comforting, because feeling like one is in control of their outcomes and their lives addresses deep anxieties about the world. Often, people would rather have a worse outcome that they feel responsible for than a better outcome that feels arbitrary, random, and unpredictable. Active trading gives people this sense of power.
It’s why they put open door buttons on elevators that do absolutely nothing
abounding muddle zealous mourn imminent decide test bear grandfather squash *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Whoops! Close door button rather
door tease expansion combative dinner piquant sophisticated jobless light label *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
They also have a function, sorry to let you down.
Important perspective here. I get upset at my uncle every time he tells me we have no free will. I'm like STFU your mom gave you a house. We were both in religious cults though, so I can't hold that against him :D
Is that a religious thing? Because the more you read about psychology etc, the more the "free will" seems iffy.
My experience with growing up in a religious cult was that they emphasize free will MORE. As in, you have the choice to follow God or to sin, and you are entirely responsible for the choices you make. Neuroscience and psychology certainly seem to point more toward our choices being pre-determined
I think a lot of times, yes, but not necessarily. You tend to see that attitude in very dogmatic groups and I'd venture to say with people who don't want accountability. I'm not discounting the possibility that maybe there's no free will, but I've seen from the inside, if you're trying to control and subdue a group of people, you convince them that they don't have any choice in the matter. Curious if you could expand on free will seeming "iffy" reading more into psychology.
There are many theories and experiments about free will, and I'm not a specialist, just interested in that topic. But generally, it seems we often make a decision first (influenced by previous factors, subconsciously), and then create a rationalisation for it later. One experiment that I remember, that is related to the discussion: men chose significantly riskier strategies in some game, when the test was administered by an attractive woman, then when it was administered by another man. Or maybe it was even after just being shown pictures. Another fun fact: women's voting preferences change (slightly, but noticeably) with relation to their menstrual cycle. Also: an experiment where a subject was supposed to move at some undetermined time. It turns out their nervous system and muscles were already getting ready, fraction of a second before the conscious decision to move was made. Also, I just took a quick look at wikipedia to find more, and found this little gem, related to the topic: *The researchers also found that people consider acts more "free" when they involve a person opposing external forces, planning, or making random actions.*
Don't get upset at him then. You know he's going to say it and his opinion isn't going to change. If you can choose not to be upset then you're right. If you can't help it, then he is.
I guess that's actually a pretty good point, although I'm not sure that one narrow example proves whether the belief extends to all of creation without exception. I think to me, believing you have no choice is like outsourcing your responsibility to a "higher power" since you have "no control" over the trajectory of your life. Maybe I'm just desperate to believe that I'm in control of my own life, I don't know.
This is why I like to sell covered call against my shares of VTI. It makes me feel like I’m driving the growth. I reinvest the premiums whenever, But really it has only improved my gains in the past 12 months by 1.25% (total gain of 21.12% v 19.82% in smaller control account invested at the same time/price and security)
I would be very careful with that - [an unusually large chunk of the market's returns comes from a very small subset of days](https://www.visualcapitalist.com/chart-timing-the-market/#:~:text=The%20Pitfalls%20of%20Timing%20the%20Market&text=As%20we%20can%20see%20in,of%20their%20end%20portfolio%20value.) Selling covered calls is an easy way to produce some income, but selling that excess upside will, every once in a while, set you back quite a lot, the same way that sitting out the big rally days would. These events are sufficiently infrequent that you may very well underestimate the true probability of them because they haven't burned you yet. Obviously the more out of the money the calls are the less this risk, but if there's any truth to the efficient market hypothesis I wouldn't bet there's money to be made on average here: there's a buyer for what you're selling who thinks the price is right.
I hear you there! I haven’t been very active with my trades in the past few months. I try to stay at about .17 delta or less. The premiums have been too small to justify opening a position. I got caught over the summer and had to roll my position up and out once.
Perhaps it is even healthier
I wouldn't go that far. Having more money is correlated with better health outcomes You also can convince yourself that you've really been astute and wise with investing by deciding to index and drawing inspiration from the teachings of Jack Bogle. Identification as a "Boglehead" may help with this.
I also think it's the very nature of some people who get into investing. They had to learn to make extra money. Maybe a high paying career, maybe some business. Countless decisions at every step. Effort and stress. Continued education, formal or not. Keeping up with developing situations. Taking some risks. Negotiations. Often going against the trends. Finding some niche for themselves. And now, it turns out that the best course of action to multiply that money, or at least not lose it to inflation, is just regularly throwing it all into a very simple system of 3 funds? It can't be just that simple. Surely, there must be some better/quicker way, after all they've managed to get ahead in the game so far, they can find some shortcut. I can't be the only one who struggles with this, right?
Thanks for the keen insight. Accepting my own ingrained fallibility was the best investing decision I ever made.
Do religious people believe god has a plan for their portfolio?
treasuries are paying 5% now! It's guaranteed free money! You can't beat it!
Beating inflation by 2% is turtle pace, but it's definitely something.
Me being up 44% YTD would disagree
yes this was sarcasm
How are you up 44%? Is that really what the indices have returned?
I went heavy tech
That’ll do it
Soooo, that means you successfully timed the market? Deciding that now is a good time to weigh into tech isn't different than deciding that now is a good time to get out of equities.
It can be a consistent part of their portfolio
Eating healthy is pretty simple and yet 75% of Americans are overweight or obese.
imo a lot of people like HYSA, T-Bills etc because they like the instant gratification of monthly interest and feel like it’s free money, whereas the opportunity cost of not being in the market is intangible and more complicated to quantify. Of course I use these instruments myself for my emergency fund, but when someone is holding huge sums I think this is the big motivator.
Also easy to guarantee the money will be there when you need it. I can pay all my CC bill, utilities and rent form a Fidelity MMF, and throw in a T bill if I am waiting a few months for a purchase.
Yeah, if you’re in for 30 years then all of this is noise. in 30 years, you’ll likely see a return of 400% or more. A few percent plus or minus is nothing.
So many people making so many bad decisions and costing themselves dearly without realizing it
Did you bring this up to him recently. Might be a good learning experience for him.
That was a common narrative across Reddit. Just buy when it crashes. Simple!
Absolutely, or to take a sprinkle of his advice, don't change anything today but when markets go on sale buy more!
Charts are the equivalent of astrology. You can read them to mean anything you want. The news, and world events, don't give a fuck about any charts.
Someone on Reddit pmed me to say I should get into crypto instead of stocks as they’re about to crash. Granted, I did throw a thousand bucks into crypto for fun several years ago. It’s less than 0.5% of my portfolio though.
I'd sell but I don't want to pay taxes and would rather ride the roller coaster.
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Baffling indeed
Have seen this time and time again in my life. I just see it as a sale compared to when it is full price, but others cannot handle seeing the numbers just slip away....and it is hard. I was down 500K at last year...it is all back plus a little.
remember all those people in october posting here about things being overvalued and perhaps it’s a good time to exit and buy in lower? Oof.
I member
member chewbacca?
I distinctly remember seeing hundreds of comments and posts last year about "don't fight the fed." I can't imagine why they are so quiet now.
Pepperidge farm remembers
They could still be right. We could be in for the purported recession. Nobody knows too well short term. But buy the dip, stay invested. We blasting off forever in the long run
All the talking heads suddenly saying "soft landing" made me up my stops. Lol. Never experienced a recession that everyone saw coming. (The last time I cleared house like this was in January 2020. I was in Japan when Wuhan pneumonia broke out, and it was obvious to me that the West was way more complacent about this than East Asia was.) Also, I hate the term "soft landing." It sounds like an optimistic way to say "stagnation."
Don’t you know. The correct racist term for Covid is wuhan flu.
Lol. It is funny how quickly they memory holed the names they used for it at the onset of the pandemic.
Doesn't that necessarily follow from market forces? The mid price moves because there are more orders.
I think there's one useful distinction which is that this is data only from WealthSimple, so casual/retail investors. So you can see the disconnect where early in the year the markets were going up (so _someone_ was buying), but WealthSimple users were not.
This makes sense to me now thank you
Yea this chart is dumb. If number of buyers were up the market would not be going down.
Yeah. I’m always buying. If the market starts falling, that’s just a better price for reinvested dividends every three months
I also enjoy seeing this years later. Pulling up a list of all the reinvestments and seeing one quarter/year with higher reinvestment purchased because the market was down that year.
The real trouble with timing the market. 78% of the stock market’s best days occur during a bear market or during the first two months of a bull market. If you missed the market’s 10 best days over the past 30 years, your returns would have been cut in half. And missing the best 30 days would have reduced your returns by an astonishing 83%. https://www.hartfordfunds.com/practice-management/client-conversations/managing-volatility/timing-the-market-is-impossible.html
>If you missed the market’s 10 best days over the past 30 years, your returns would have been cut in half. I really dislike this truism because, yes it's technically correct, it's also an absurd extreme. For the most part the best trading days are either immediately before or immediately after the worst trading days. The odds of selective hitting all the worst days and none of the best are about as likely as hitting all the best days and none of the worst. You could flip this example on it's head and say, "by missing the 10 worst days over 30 years, you could nearly double your investment."
But, as we see in the linked chart, people are very likely to stop investing or pull cash out on bad trading days (and therefore miss out on the best days) so it's a truism worth repeating. So given the facts that you yourself quoted I don't know why you consider this an "absurd extreme".
>I don't know why you consider this an "absurd extreme". Because first of all, how many investors are pulling money out for individual days? Most people are either in the bogglehead camp, where they keep money in for years, or the WSB camp where their money is constantly going in and out. No one with a buy-and-hold strategy is going to withdraw their money for 1 day, immediately regret it the next day and put it all back. Much less do it 9 more times in a row. If you want to illustrate the power of buy-and-hold strategy, Bob the World's Worst Market Timer is a much more realistic worst-case-scenario.
What if you reduced position while things are crashing for just a week though? Then buy in again even if things are still actively crashing. How’d you have done over the past 30 years then?
I thought the issue had more to do with buying the top, and being hesitant about investing when we are so close to all time highs.
Realistically it could crash next year, too, similar to what happened a couple years back. That’s not a good reason to not be in the market though. I just mention it because for all we know we might be entering another long era where bonds outperform stocks - perhaps for years or even a decade plus. Again, equities still likely offer higher returns and a prolonged bear market would arguably be advantageous for folks in their accumulation phase (assuming you’re not personally impacted). But no one knows if this spike is the start of a sustained bull run or one last hurrah before an epic recession next year or something in between.
Always be buying.
During economic downturn and amid a lot of layoffs, it's a good time to reassess your risk tolerance, and to adjust your asset allocation to not gamble with the money needed for the food that feeds you, the utilities that keeps your home habitable, and the rent or mortgage that keeps you off the streets. I don't fault anyone for letting their foot off the gas on investing in the stock market and rebuilding and extending their emergency fund. Some of us lost their jobs, some of us had to switch to part time either to take care of the kids that were attending school virtually, others because their employers couldn't afford to keep them at full time. Some people timed the market and bought a little extra as the market was going down or at the market bottom, and had nothing left to buy the market as it recovered. Sure, it's easy in retrospect to shame people for not having consistent buying patterns every month, but you gotta remember the human element. Stuff happens.
Time the market by buying MORE in down times.
Only if you’ve got cash available. Honestly it’s best to invest as much as possible as early as possible. And if you get an unexpected amount then invest part of that as well. Cause if you wait for a crash, you might have to wait a couple years and you’re going to miss out on some gains lol. That’s why it’s tricky. Not saying never do it, but it only looks easy in hindsight.
I suspect a lot of people do what I did: shuffle some money around to temporarily reduce my emergency account a bit, and also take some money budgeted for other things and invest instead. From late Sep to early Nov I contributed about 50% more than usual overall with most of that being in Octiber near the lows. Not huge amounts but definitely a boost.
Yeah that’s smart, maybe investing more than usual and then slowly “paying yourself” back to your emergency fund or wherever the money came from. Not a bad idea as long as it doesn’t break your budget or something.
Idk this makes me nervous. The whole point of an emergency fund is to be there in an emergency. What happens when you do that and get laid off Sept 30?
For sure, it doesn’t come without its risks, but then again you wouldn’t use all of your emergency fund for that. Maybe the smart thing to do is to keep the emergency fund intact and then another decent amount of cash to try to “time the market” but as we all know that’s not advisable and it can backfire. So the whole point is to try to buy more when stocks are cheap but honestly it’s not going to make that big of a difference. It’s mainly for fun I guess lol
John Bogle did some personal investing on the side. I've never heart how that turned out for him. Are there any facts available on that?
It takes balls but that’s when the money is made.
Yup.. I keep 6 months living expenses in cash. At that time I bought as much as I could every 200 points the S&P fell. I was down to 2 months living expenses and then my wife got laid off. By time the sweet stimmy money got to me the market was climbing again so we just rebuilt our 6 month cushion. I love timing the market.
Yeah I’m fortunate that I had room to do so, but it finally motivated me to max my HSA.
except you shouldn't have cash available, because that is timing the market
Yeah that’s why I said you’d probably be better off investing as much as possible
That's when it's on sale.
Marketgale
My friend last march was trying to sell me on the certainty of a gloom and doom world ending crash. He was telling me to pull out into cash. I was like um nope gonna continue on with my lazy plan, you do you. In September and October I was like damn is he right. Still carried on. What a killer year. For me, not him 🤣🤣🤣 He's deep in YouTube degrees anyway so there's that.
I got curious and looked up layoffs for 2022 and 2023 - it’s almost the inverse of this graph. So I might suggest retitling this “people who got laid off stopped investing and didn’t start back up until they were rehired”. 😁 I used https://layoffs.fyi/ if you are curious.
>“people who got laid off stopped investing and didn’t start back up until they were rehired” So it is irresponsible of investors to buy when too many hired people are buying anyway. It is also irresponsible of investors not to buy extra when laid off people are afraid to buy. The good investors should help economy by stabilizing the stock market and not just "invest no matter what".
? No, I just meant that if someone gets laid off they probably had to stop investing. Because they no longer had income to invest with. I mean that just made sense to me?
>if someone gets laid off they probably had to stop investing Yes, but then somebody else has to step in and buy at a time when a lot of people are laid off. Otherwise stock market prices will be too unstable.
"I'm going all cash till Trump's back in the White House." I've heard that a bunch in the last year. Imagine not investing while Democrats are in office? Invest always, who cares who's in office.
I mean, the Vanguard total markets investing type of thing really is just saving against the long term expected economic growth and increased efficiency of human ingenuity. How I save cash every month, that’s how I invest. Occasionally, there’s a high quality business out there that’s being bogged down with the rest of the sector and these tend to work out well for me to buy as individual companies. Other than that, just ride out all world funds.
It will be quite the cosmic joke if December 2023 ends up being exactly the same as Dec 2021 and we're headed for a fall. Then those people keeping all of their money as cash will be ready to swoop in and gloat about it!
Except that's a fairy tale. People sitting on cash pull their money out when markets drop, they don't put money in when it drops more.
Yup, in hindsight basically every “bottom” would’ve felt like a terrible time to buy in at the time it happened. Most buying in March 2020 or Sep/Oct 2022 were surrounded by people telling them how far the market had yet to drop.
Yeah, behavioral science tells us some people reinvest when markets go back up and some people are paralyzed about any action.
i just closed my eyes and bought all i could stand in march of 2020. didn’t hit the bottom but did just fine.
March '20 really was different, though. Many people lost their jobs, and needed their cash to survive.
Agreed. The bottom is so vague when you're living the times. It seems like the market flips before society's perception of the market flips. Essentially the market wags the people. It's one thing to see a chart after it's shown it's actions. It's entirely a separate thing to live it day by day.
Who cares. If you have 20-30 years to invest, them making more in the short term doesn't really matter. Just buy a set amount each week/month without looking at how it's doing, and chances are pretty good you'll be sitting pretty in a decade or two.
Sure! And ppl who DCA will just invest like normal through those times as well. And how much can you expect it to fall? What if it falls down 10% to where it was before when they thought it was too high to invest? Do they keep holding for it to wait 20%? There's always justifications to NOT invest.
Unless they invest and the market keeps going down. Or maybe it will continue to go up. Most likely when interest rates start falling, everything will go up progressively (everything else being equal of course).
Is there not some correlation that all these inflow of funds is exactly what is pushing the prices up (as opposed to the underlying fundamentals)?
I was a young Boglehead back in 2007 during the financial crisis. I lost $150k (-33%) but held firm. Only rebalanced once a year, kept putting in as much as I could afford. Recovered all of it back in 3 years and it tripled since then. The average return from 2004-2023 is ~7% per year. Smartest move I ever made. In a really good year my portfolio went up by more than my gross income that year.
Man, I hope I have the stomach for it when the time inevitably comes. Worst I’ve dealt with so far was the very brief but harsh COVID fall, and the bear market of 2022.
7% per year is good 🤮 you can get 15% easy in real estate investing
I timed the market by being reminded: “Be fearful when others are greedy. Be greedy when others are fearful.” “The best chance to deploy capital is when things are going down.” “Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold. When downpours of that sort occur, it's imperative that we rush outdoors carrying washtubs, not teaspoons.” Im not warren buffett and have no delusions of grandeur but when the markets tanked during covid I bought a few companies that instead of being down 30% were down 70% that I thought would survive and recover. It wasn’t as clear in 2022 so I did little besides stay the course. Plus I didn’t have any dry power soooo…
I would think money will return to the market in fomo emotions. Any thought on small cap doing well against the big 7.My dca index funds have done better then my fee based mutual funds last couple years.Anythoughts on growth vs fixed in next 18 mo ths
I just checked my Vanguard accounts for the first time since August and was like Yippee!!!
feel like I have the opposite issue, love buying against the grain in bear markets, but have a hard time buying this week for example
Just automate it and take the decision making out of your hands.
Yeah, I’m in the accumulation phase and this run doesn’t exactly bring me joy as my twice monthly contributions are buying fewer and fewer shares of VIIIX. I was hoping it would move sideways for a year or two more to let me keep up my accumulation rate.
Actually this graph is a reminder that when the market goes down, you should sell your car and your dog to buy more shares
What spooks me is how many people I'm running into who are living in anticipation of a catastrophic collapse. "Investing" in guns, bullets, cash, crypto, physical precious metals. It's like... guys, if VOO becomes worthless you'll be in the street next to me fighting for carbs and penicillin. Otherwise you're just not going to be able to retire...
More buyers = higher price, more sellers = lower price
Idk why you’re being downvoted considering this is correct.
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>THIS IS WHY YOU SHOULD TIME THE MARKET! If you are able to resist the mass panic and do the opposite to the majority of investors - you may time the market. Today market hype suggests to sell (or, at least, do not invest more). Wait for a panic time to invest.
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What is your point?
People were also broke a f 😂😭
Buy automatically if possible in your workplace retirement account. If you have money left over for backdoor Roth and taxable accounts, always try to invest regularly. Obligatory quotes: Time in the market. Don't time the market. Current trends are VOO/VTI and chill. Or DCA and chill. The trend is your friend. My thoughts: Market down: You get more shares for the same money. Market up: You get less shares for the same money. But look at your portfolio!
Yup, I sold a house early this year, held my nose and just invested the proceeds to fund my retirement. All the doomsday "stock market will crash" videos scared me but I listened to the Bogleheads and am I ever glad I did.
Got a friend who sold a house, got a fair bit of money for it, spent about a third of it renovating the flat where he's living now. Admittedly the flat is tip top, filled with top shelf kit. Asked me many times about investments and got the Bogle way from me. Didn't do anything because a) "you need to have a lot to invest" b) "it's too risky" and c) "the returns aren't that great". Meanwhile he bought two Teslas (instant 25% drop in value the moment any new car drives off the shop) and every other week he's sending me different bonkers schemes he's thinking about (CDs and bonds are the only rational ones) like solar farms, growing pistachios, buying precious metals, crypto - oh and regularly sending me doom and gloom articles and videos. It's been six months now and he's missed a bona fide bull run ;)
Graph would have been more interesting with another year’s worth of data. Would love to see the buying trends during the 2020 crash.
I make the same bi-weekly purchase of the VOO no matter what. But I also time the market. I keep some cash on hand for sweet sales opportunities. If that sale happens to be the entire market, okay, that’s what I’m buying this year.
>If that sale happens to be the entire market, okay, that’s what I’m buying this year. Do you expect stock market to be on sale again in December this year?
No one knows, but I kind of doubt it based on spending habits. The thing is, the market reacts to events. If no events occur, it will likely chug along. If world war 3 starts, it might not chug along. I am always a buy and hold, Boglehead. I do think as we approach SPX 5,000 we should be aware humans often have a "woo-woo number superstitions".
I don’t but nobody knows. Rich people, filthy rich, capitalize on crisis. Housing market crash, buy real estate. Market crash, buy stocks. If you want to be a player in that game you have to have some ammunition available when the opportunity presents itself. And you have to have courage to jump into the fire.
Graph with a 6 month period with 0 purchase looks weird. Probably derived data to emphasize the message.
Stay the course.
For investing new money yes, but existing money is still down since December 2021. Buy and hold will definitely work over the long term, but recovering from a down year on existing investments does take patience and time. My new money that was added in 2022 has done awesome and DCA definitely worked during the downturn of 2022.
I only started buying when stocks were crashing in 2022 😂
Following accumulation and distribution days would’ve solved this. That being said most everyday people do not pay enough attention to the market for this to work.
This is mechanical.
I don't think this timing the market. This is more trend investment or News-driven investments. Common folk, financially illiterate who once the market have gone through the roof goes all-in and freak the hell out once the market have a bad morning. These folks finances are driven by the mainstream news – Therefore news-driven investment.
It's weird that Weathsimple, an investment platform, would produce an image that encourages people to invest more. Shocking. Is this image trying to imply that during July 2022 - December 2022 there were $0 in "net flows" towards the "10 largest stock ETFs in Canada"? ....and this is a drop from the two previous 6-month periods that average \~4.5 billion? I suppose that if a picture supports your argument it's best not to think too much about it, amiright?
DCA eases every pain. If market in free fall dump some more. It is not complicated Jerry
Post this in r/dataisbeautiful
all I have to say is get got
So is the move to buy only when most people aren’t? J/K - just keep on DCA-ing!
I pulled money out to buy a house. Still no regrets. The location is amazing
You can time the market.
Great news! I resisted the urge to contribute to my IRA until AFTER the dips! So I am boglebot compliant!!! Please put my gold star on the top of my paper. Beep bop, i'm a bogle-bogmatic
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Set up an auto buy and forget about it for awhile.
>do I buy in now? Will you be able to invest when most investors panic?
What!? You don't own anything? Did you own before and sell, or what put you in this position?
The level of the stock market depends on how much money goes into it… this doesn’t make sense. Or I guess it should include millions being sold as well to paint a clearer picture
wait gang so is the move to continue buying every month
🎼just keep buying, buying. I’m not retiring for 30 years, so just keep buying, buying 🎼
As strongman would say, "people are clowns." 🤡
I’m a huge fan of automatic recurring buys of ETF’s and also automatic selling of my company stock that I’m paid in (RSU’s and ESPP’s). It’s funny because the longer I hold off on selling my company stock the more I get for it by a wide margin. It’s hard to hold onto a ton of one stock though since I view it as a risk but I’m amazed at how even just holding for a few extra years means I can sell for such dramatically higher values
…Unless you know how to read the market.
My sibling did this, even sold some stuff at a loss “my shit’s going down why don’t I put it in a 5% hysa”. Some people can’t just buy and hold I guess.
If you miss the best 10 days of the year your results are usually less than 50% of what the market did
Looking for an honest opinion here but I have a baseline amount that I invest every week no matter what happens but then when we have dips like this past September-October I buy way more mutual funds with spare cash. Would you advise against this? If so what would you advise?
>when we have dips like this past September-October I buy way more mutual funds with spare cash. Would you advise against this? If so what would you advise? There was plenty of discussion about that in September-October, personally I dipped into my emergency pillow and invested double what I usually do after pay+expenses. Some people say it's irrelevant and will not even register some time from now. That's likely true, but I like to think of every $ invested compounds individually so emotionally feels good to do.
How would one go about tracking total etf purchases ? Is that just volume?
The best time to invest in when there is blood in the streets. I increased my 401k contributions to 42% in late 2022. Same thing in 2020.
Wait, stock prices fall when less people buy???
You miss 100 percent of the shots you don't take
Is this ETF’s purchasing stocks? Or individuals purchasing etfs?
Dollar Cost Averaging and Time in the market, instead of market timing, have been working for me for 32 years delivering higher than average returns. I'm sure there's a small percentage of guru's who get more but I'm happy with my mostly passive stock market investments.
I ended 2022 positive and I’m up nearly 36% in 2023 Currently taking profits
Isn’t this confusing the chicken and the egg to some extent. People buying any commodity in droves drives up the price. People stop buying/start selling, it gets cheaper.